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#1803069 - 04/09/13 10:24 PM Bank identifies MSB- Customer denies
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
TN
Account monitoring- Potential MSB identified

For customers that the Bank has identified through the course of account monitoring that are believed to be an unlicensed or unregistered Money Services Business (MSB) (specifically Check cashing) and through enhanced customer due diligence find that the Bank customer strongly states that such activities do not take place.
Is there an affidavit or statement that you would be willing to share that you may have your customer sign attesting that such activities do not take place?

Example:
Car dealer deposits multiple third party checks on a consistent basis in amounts greater than $1000. The customer further states that in no case is cash back provided to their customer in amounts greater than $1000 to any one individual in any one business day. Customer provides reason that the third party checks are used for car payments or for the down payment of a car.


Thank you,
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#1803076 - 04/09/13 10:40 PM Re: Bank identifies MSB- Customer denies Banker Chick
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,973
Galveston, TX
Well they either are or they are not. An attestation from the customer would be of little value. The question may not be a BSA issue, but of a risk issue. Do you really want to accept the risk of a business like this depositing third party checks that could come back for three years (depending on your version of the UCC). I would just tell them that you will no longer accept them. There really is not a legitimate business purposes for routinely accepting such items.
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#1803096 - 04/10/13 01:00 AM Re: Bank identifies MSB- Customer denies Banker Chick
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,369
Illinois
Quote:
Is there an affidavit or statement that you would be willing to share that you may have your customer sign attesting that such activities do not take place?


So we can add perjury to the list of activities on the SAR in addition to being an unregistered MSB?

When the examiners come calling I wouldn't want my defense to their questions regarding the account activity to be, "But they signed an affidavit saying that they weren't dealing heroin...aren't an MSB...aren't a terrorist...etc." I agree with Randy. If you see the red flags and are concerned enough about the activity to ask questions, then it is time to kick them to the curb unless they cease the activity you are not willing to accept.
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#1803205 - 04/10/13 03:17 PM Re: Bank identifies MSB- Customer denies Banker Chick
Banker Chick Offline
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Joined: Jul 2006
Posts: 37
TN
Thanks for your feedback rlcarey and Brian!
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#1803297 - 04/10/13 04:57 PM Re: Bank identifies MSB- Customer denies Banker Chick
WonderWoman Offline
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WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
They would be an MSB??? Car Dealerships do this all the time with Tax Return checks & "double" or "match" the downpayment if you use your return.

Did I miss a webinar where this practice is MSBable?
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#1803415 - 04/10/13 07:35 PM Re: Bank identifies MSB- Customer denies Banker Chick
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,801
Cape Cod
No it is not MSBable if it actual is as represented. But I get the impression that Banker Chick's bank isn't able to verify the nature of the transactions involving the third-party checks that appear in the customer's deposits.
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#1803432 - 04/10/13 08:00 PM Re: Bank identifies MSB- Customer denies Banker Chick
WonderWoman Offline
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WonderWoman
Joined: Mar 2007
Posts: 2,108
gone fishin'
Thanks John! That's how I was reading the original post too - but just double checking.
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#1803464 - 04/10/13 09:02 PM Re: Bank identifies MSB- Customer denies Banker Chick
edAudit Offline
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edAudit
Joined: Jul 2008
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You are here
Wtih the exception of Tax Return checks that double or match the down payments I would not expect to see any third party checks at the car dealer. Loan checks are generaly payable to the borrower and the dealer as well. You could insist that all checks deposited be payable to the dealer.

As for the dollar amount over $1000. If you had a car repaired at a dealer that amount could be exceeded easily.
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#1804004 - 04/11/13 09:37 PM Re: Bank identifies MSB- Customer denies edAudit
McGruff Offline
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McGruff
Joined: Feb 2004
Posts: 262
Texas
Originally Posted By: EdAudit
Wtih the exception of Tax Return checks that double or match the down payments I would not expect to see any third party checks at the car dealer.


I agree. I have an auto dealership where the owner is a registered MSB, solely for the purpose of cashing income tax refunds for those customers who intend to use all or some of the refund as a down payment on a vehicle. These are the only 3rd party checks I see in his deposit, and even though I am comfortable with this customer, I still have him on my HighRisk List as an MSB/auto dealer, and monitor him closely. I do have other c-store type customers who have pushed the envelope in the past in regard to MSB activity. For those, I provide a packet explaining FinCEN and MSBs. They then have a choice of stopping the activity, or registering. Either way, they are on my radar and get monitored very closely. If I have to have the discussion a second time, I add an explanation of how the front door swings shut pretty strongly, and they should watch to make sure it doesn't hit them on the way out.

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